In the Context of ABC Inventory Analysis, Which of the Following

question 26

Multiple Choice

In the context of ABC inventory analysis, which of the following statements is true of class C items

• A) They require close control by operations managers.
• B) They comprise more than 80 percent of the total dollar usage.
• C) They can be managed using automated computer systems.
• D) They make up less than 10 percent of inventory items.

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Definitions:

Physical Units

A measure of quantity in production or inventory, typically referred to when counting tangible products or items.

Finished Goods Inventory

A category of inventory that includes items that are ready for sale, having completed all stages of production.

Production Activities

Production activities refer to the processes involved in creating goods or services, including manufacturing, assembly, and quality control.

Predetermined Overhead Rate

An estimated charge per unit of activity used to allocate manufacturing overhead costs to products.